Turkey is quickly establishing itself as a welcome host as Russian billionaires look for a new home.
Turkish Foreign Minister Mevlut Cavusoglu told CNBC Saturday that he would welcome Russian businessmen into the country as tourists and investors if they followed international law.
It was seen as a direct reference to the recent arrival of several Russian capital groups, after President Erdogan said certain capital groups could park their facilities with us.
Turkey is a non-EU country but a NATO member and may be encouraging investment from billionaires as it seeks to shore up its economy. Wealthy Russians are looking for investments there.
Any gains could be seen as short-sighted for the balancing act between Russia and the West.
A senior director at the Atlantic Council in Turkey told CNBC thattracting Russian money could hurt Turkey in the long-term.
Turkey wants to tread a fine line in the war in Ukraine.
It has stopped short of implementing sanctions like those imposed by the U.S., EU, U.K. and others because it does not oppose them on principle.
The neutral mediation role has been used to facilitate peace talks between Russia and Ukraine. Negotiations in Istanbul on Tuesday appeared to raise hopes of a breakthrough after Moscow agreed to cut its military assault on Kyiv.
If they’re parking their yacht, that’s OK. But Ankara will be very cognizant about Turkey becoming grounds for sanctions.
Turkey has close economic and diplomatic ties with Russia, and its stance of nominal neutrality is largely understood. Western allies have not pressured Turkey to join sanctions, nor will they punish it for not doing so.
It is a legitimate outpost for assets belonging to Russians. An influx of foreign investment and luxury assets could provide a boost to the Turkish economy, which went into crisis mode last September as interest rate cuts pushed inflation higher.
Emre Peker, director and Turkey specialist at political risk consultancy Eurasia Group, said that Western tolerance is likely to decline if Turkey starts actively soliciting wealth.
If they are parking their yacht, that is fine, but Ankara will be careful to prevent that.
The Turkish Embassy in London did not respond to CNBC's request for comment.
The war and Russian sanctions have already hurt Turkey's economy, so it can't afford to be hit with secondary sanctions.
Inflation hit a 20-year high of 54.4% last month due to a crash in the lira and soaring commodity prices. The impact of the war is yet to be fully reflected.
Russia's attack on Ukraine is making Turkey's economic situation more precarious.
The ramifications are clear. Inflationary pressures are higher in Turkey. About one-third of inbound tourism from Russia and Ukraine will be affected by the sanctions. It will affect Turkish investment into Russia and Ukraine.
Turkey's reputation as an independent mediator in the ongoing conflict is one of the reasons why Erdogan wants to win favor both at home and abroad.
Erdogan is desperate to get through to the elections next year, according to Timothy Ash, senior emerging markets strategist at BlueBay Asset Management.
An advertisement for Starbucks seen on the motorway near Istanbul on Tuesday, 17 October 2017.Turkey can benefit from the movement of wealth from Russia without drawing political and economic ire.
Arslan says that attracting investment from some of the 450 Western brands that have left Russia is part of the plan.
She said that it can be a huge opportunity for Turkey if it plays it right and that it could potentially attract investment from foreign companies.
Turkey's door is open to companies looking to relocate their business outside of Russia, according to the president.
Many brands and groups from around the world are leaving Russia. He said that the door is open for those who come to our country.
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